Ten aerospace companies abandoned their plans to invest in the Philippines in favor of Vietnam amid concerns over tax incentives and the uncertainties generated by the Tax Reform for Acceleration and Inclusion law.
Aerospace Industry Association of the Philippines president Dennis Chan said those companies earlier made known their intention to have manufacturing and assembly operations in the Philippines. Most of them closed shop in China and were looking for alternative sites.
“We initially thought that the US-China trade war will benefit us. The tax reform law was another hurdle for these companies and other companies who are eyeing the Philippines,” Chan said.
An existing investor in the Philippines, Rockwell Collins Inc., temporarily shelved an expansion plan with a third plant in Batangas, because of the Train law.
Rockwell Collins, formerly B/E Aerospace Inc., is a manufacturer and supplier of aviation and integrated solutions for both commercial and government applications.
It produces and supplies aircraft cabin interior products, including cabin seating, lighting, oxygen systems, food and beverage preparation and storage equipment, galleys and lavatories to aircraft manufacturers.
AIAP said despite these issues, it remained optimistic that it would achieve the 2022 export target of $2.5 billion.
Exports in 2019 are expected to reach $2 billion, up 11 percent from $1.8 billion in 2018.
AIAP will host the first capability and capacity trade show on March 27 to 30 to feature the latest machines and aerospace equipment as well as the capacity of the Philippines as a site for aerospace firms and their investments.
The Philippine Suppliers and Manufacturers 2019 is an international event that will focus on reverse trading where the country is expected to generate investments in exchange for buying machinery, equipment and aircraft.
The event will also showcase the Philippines’ technological capabilities in aerospace procedures from machining, casting of parts, surface coating, plating, heat treatment metal stamping, sheet metal cutting, painting, plastic injection and packaging.